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Strong population growth behind Melbourne’s rising house prices

MELBOURNE’S rapidly growing population is underpinning the present surge in house prices, the Real Estate Institute of Victoria says.

REIV president Joseph Walton said the outer suburbs were among the areas to increase, rising by 8.7 per cent in the 12 months to December.

The median house price for Melbourne’s outer suburbs for the December quarter was $605,500.

According to the REIV, the annual increase in prices for all metropolitan Melbourne houses was 4.6 per cent to a median price of $770,000 for the quarter.

“Melbourne’s outer suburbs experienced solid price increases in the past year, driven by strong population growth, record low interest rates and improved infrastructure,” Mr Walton said.

“The city’s outer suburbs continue to offer affordability with greater infrastructure, such as the South Morang train station, making these areas more attractive to buyers.”

The Australian Bureau of Statistics last week released the latest regional population figures, showing almost 5000 people had moved to Cranbourne East and South Morang each during the 2015-16 financial year.

The data showed Melbourne’s population grew by more than 107,000 people over that time — a significant rise considering the city grew by an average of 85,240 people a year in the five years prior.

Suburbs recording the biggest growth were South Morang, Cranbourne East, Craigieburn and Point Cook.

Asked whether there was a glut of apartments, Mr Walton said with Melbourne’s population expected to increase by 100,000 new residents each year the supply of apartments was “catching up with the demand for dwellings”.

Metropolitan Melbourne’s vacancy rate — for all dwellings — had also tightened and sits at 2.3 per cent, down from 3.1 per cent in February 2016.

Mr Walton said Melbourne remained “considerably” more affordable than Sydney.

“(There are) homes still available under $350,000 within 35km of the CBD,” he said.

 

This article was originally published by Rebecca David on the 7th April 2017 via heraldsun.com.au

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